WaMu's Earnings Up 10% Despite Drop in Home Loans

Washington Mutual earned $1.05 billion, or $1.18 per diluted share in the first quarter, up 10% on a per share basis from one year earlier.WaMu's first quarter results included a $644 million pretax income from the sale of its former subsidiary, Washington Mutual Finance Corp., offsetting pretax restructuring and technology related charges of $68 million, a pretax charge of $89 million related to the early retirement of high-cost FHLB borrowings, and a pretax reduction of $107 million as a result of a one-time effect from a change in accounting for gain from mortgage loans. Income from mortgage banking was $220 million, less than half of the $497 million in mortgage banking income reported in the first quarter of last year. Adjustable-rate mortgages accounted for 53% of WaMu's $47.9 billion in home loan volume during the quarter. WaMu reported $920 million of impairment, amortization and other reductions in the value of its mortgage servicing rights during the quarter, but this was offset by hedging gains. WaMu increased its common share dividend by one penny to $0.43 per share, payable May 14 to shareholders of record as of April 30.